Daimler is said to be considering passenger car assembly in Russia for its Mercedes brand, reports SKRIN Newswire. The chief executive officer (CEO) of Mercedes-Benz Russia, Yan Madeo, said that a decision was currently being weighed up, although it was not being helped by the volatile local business environment, including the implementation of a new scrappage fee. He added that a decision may be taken by October.
Significance: While Daimler is already involved in light commercial vehicle (LCV) and truck manufacture in the country, it has until now relied on imports of passenger cars. However, as demand continues to grow, and with ambitions of selling more than 20% year-on-year (y/y) more vehicles last year during 2013, it is no doubt looking to the period beyond, bearing in mind the potential for the cost of imports to rise further. Certainly, it has already suggested that it plans to achieve 60,000 units per annum (upa) in the medium term and local assembly would probably be the best way of ensuring this. However, its ambitions will be weighed up against other potential investments in other markets and the opportunities for the best returns. This could include a new site in Brazil.
